Will You Need Indemnity Long Term Care Insurance?

No doubt, long term care insurance is an essential part of life. It should actually be considered one of the basic necessities of a man as it provides comfort and financial security. There are three general types of long term care insurance policies and the indemnity long term care insurance (LTCI) is one.

Your choice of LTCI policy will have to depend on your health care needs, budget and total assets. Among the different types of LTCI policies that are offered by insurance companies, the reimbursement method is normally purchased because it is the most affordable.

Reimbursement policies pay the insured individual’s total amount of expenses for eligible LTC services which can be lesser but not more than his policy’s maximum daily benefit. In case his total expenses for care exceed his daily benefit, he has to pay the excess amount using his personal resources.

With an indemnity LTCI policy, on the other hand, the insured person will receive his total daily benefit amount as stipulated on his policy regardless of his actual expenses on care. One’s eligibility for benefits is not based on the type of LTC service that he has acquired so whether he hired a licensed caregiver or had his spouse assist him in his activities of daily living (ADL) wouldn’t matter to the insurer.

For example, your indemnity LTCI policy indicates a maximum daily benefit of $220. Even if your actual daily expenses on a home health aide only totaled to $51, your policy will still pay you $220 in benefits as this is clearly stipulated in your contract.

Factors to Consider for an Indemnity Long Term Care Insurance

Indemnity policies are more expensive than reimbursement policies and so before purchasing this type of product one has to give some thought to it.

Even though an indemnity LTCI policy pays the insured his maximum benefit amount, you should not rush and buy it right away. Ask yourself first if you really want and need to receive your policy’s total daily benefits or would you rather let some amount grow in your pool of benefits so that you have something to fall back on in the future.

Next thing to do is to determine where you want to receive care. If you’re opting for in-home care, then there’s no doubt indemnity is for you because if you’re going to buy a reimbursement policy you will be required by your insurer to submit the official receipts that have been issued to you by the nursing home or community-based LTC facility from which you received care.

Aside from determining your choice of LTC setting, assess your total assets because you’ll never know exactly how long your benefits will hold out once they are in your hands. In case you run short, a good amount of assets can back up your LTC expenses.

Many people in the past have, after all, proven the saying a fool and his money are soon parted as true.

To avoid ending up like that fool, consult a licensed LTCI agent in your area before you fork out your hard earned money for an indemnity long term care insurance policy.